FAIR VALUE

Financial Assets

The following table summarizes our fair value measurements at March 31, 2019 and December 31, 2018, respectively, for financial assets measured at fair value on a recurring basis:



	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(in millions)
March 31, 2019
Cash equivalents	$	3,582	$	3,582	$	—	$	—
Debt securities:
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	479		—		479		—
Mortgage-backed securities	3,141		—		3,141		—
Tax-exempt municipal securities	2,103		—		2,103		—
Mortgage-backed securities:
Residential	85		—		85		—
Commercial	509		—		509		—
Asset-backed securities	1,032		—		1,032		—
Corporate debt securities	2,949		—		2,949		—
Total debt securities	10,298		—		10,298		—
Total invested assets	$	13,880	$	3,582	$	10,298	$	—

December 31, 2018
Cash equivalents	$	2,024	$	2,024	$	—	$	—
Debt securities:
U.S. Treasury and other U.S. government corporations and agencies:
U.S. Treasury and agency obligations	417		—		417		—
Mortgage-backed securities	2,544		—		2,544		—
Tax-exempt municipal securities	2,771		—		2,771		—
Mortgage-backed securities:
Residential	55		—		55		—
Commercial	523		—		523		—
Asset-backed securities	985		—		985		—
Corporate debt securities	3,142		—		3,142		—
Total debt securities	10,437		—		10,437		—
Total invested assets	$	12,461	$	2,024	$	10,437	$	—

Financial Liabilities

Our debt is recorded at carrying value in our consolidated balance sheets. The carrying value of our senior notes debt outstanding, net of unamortized debt issuance costs, was $4,776 million at March 31, 2019 and $4,774 million at December 31, 2018. The fair value of our senior notes debt was $5,006 million at March 31, 2019 and $5,191 million at December 31, 2018. The fair value of our long-term debt is determined based on Level 2 inputs, including quoted market prices for the same or similar debt, or if no quoted market prices are available, on the current prices estimated to be available to us for debt with similar terms and remaining maturities. Due to the short-term nature, carrying value approximates fair value for our term note and commercial paper borrowings. The term loan outstanding and commercial paper borrowings were $1,318 million as of March 31, 2019 and $1,295 million as of December 31, 2018.

OtherAssets and Liabilities Measured at Fair Value

As disclosed in Note 3, we acquired MCCI and FPG during 2018. The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs. The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. We developed internal estimates for the expected future cash flows and discount rates used in the present value calculations. Other than assets acquired and liabilities assumed in these acquisitions, and the put option liability and call option asset associated with our investment in Kindred at Home as detailed in Note 2, there were no other material assets or liabilities measured at fair value on a recurring or nonrecurring basis during 2019 or 2018.